Thanks for stopping by. We’re going to check in on Microsoft’s call, which starts in about an hour. You can listen too by going to the investor relations site here. Let me know your thoughts — what questions should Wall Street’s analysts ask? What should the company focus on in the new quarter? — along the way in the comments tab.

In a nutshell, Microsoft’s results for the top and bottom lines were better than what Wall Street expected. Net income rose to $6.56 billion, or 78 cents a share, while revenue jumped 14% to a record $24.52 billion. Analysts had expected 68 cents a share in profit on revenue of $23.7 billion, according to Thomson Reuters.

Investors initially sent the shares up some 3% after hours, though the stock has been gyrating.

The big jump in revenue came partly from some injected fuel from the Xbox console. Microsoft said that through Dec. 31, it sold 3.9 million of the next-generation Xbox One videogame systems into the retail channel, while the prior-gen Xbox 360 sold 3.5 million.

That’s a pretty strong number for the prior generation. It could reflect holiday shoppers falling back to a less-costly option. The Xbox One retails for $499, which was about a hundred bucks more than Sony’s latest, the PlayStation 4. But if Microsoft can keep selling both consoles, that’s a win. Nintendo reaped a bundle from sales of its first Wii console for years.

Those heady Xbox numbers helped revenue at the devices and consumer division to climb 13% to $11.91 billion. The division also includes the struggling Surface tablet and the Office software suite, one of Microsoft’s cash cows.

The company said its commercial segment, which includes “cloud services” (a k a online storage and software that runs on the Web and the like), was up 10% to $12.67 billion. (This is a good time to pull a calming image of a cloud.)

All of that said, what should we be looking for on the conference call (t-minus 35 minutes from now)? Shira Ovide gave a run down earlier today of stuff that matters for earnings and the call. Let’s go through some of them.

First up, we could use an update on how that search for a new chief executive is going. Sure, Microsoft said Steve Ballmer would step down at some point this year, which gives the company the benefit of time.

But it’s been five months already, and the longer this drags along the more speculation and questions of “what’s going on” swirl around. Already, the company has seen contenders — Ford CEO Alan Mulally, for example — come and go.

Hanging over the search is the fact that the new chief will have to deal with a suddenly much more visible Bill Gates, the founder, and the presence of Ballmer still on the board. Basically, the company’s third CEO ever will have CEOs 1 and 2 staring over the shoulder.

Office is one cash cow. The other is Windows. Pay attention for an update there, as there are so many storylines. For one, the PC industry slump continues, and that’s just never good for the operating system that dominates the PC market. Gartner and IDC said PC sales fell 10% in 2013, though the drop in the fourth-quarter ended up not as bad as forecast. (And the data are subject to revision.)

Also, there is Windows 8. It got off to a rocky start and hasn’t spurred sales of PCs as previous versions of Windows have done. The “Metro” interface — the tiles — are everywhere in Microsoft’s portfolio, but customers aren’t taking to it well — at home or in the office. That said, it’ll be interesting to see if the unified “tile” strategy of phones, Xbox, Windows, etc., nudge people along.

Finally, there is hardware. Some more thoughts on Xbox are welcome. It’s fair to say the collective early thinking is that the PS4 is winning the race — it had a bit of a sales head start and isn’t as expensive. But that doesn’t mean the Xbox One is faring poorly, and it will be good to hear what Microsoft has to say on these early days of the competition.

Also, there is Surface. It wasn’t that long ago that Microsoft coughed up that $900 million write-down on the tablet. The Surface 2 is out now, and it did get some decent reviews compared with the first generation of the device. Microsoft said revenue from the prior quarter to $893 million.

Let’s throw Nokia out there as another watcher. Revenue at the handset business Microsoft is acquiring fell 29% . That’s just not good news for a company that is swallowing a big acquisition in order to make a bigger splash in the smartphone market. Nokia sold fewer Lumia phones in the quarter than it had in the previous three.

Amy Hood, Microsoft’s finance chief, said earlier today that she was encouraged that sales were up from a year earlier. “We have a lot of work to do” on Windows Phone. Perhaps she will have more to say on the call.

We’re five minutes away so it’s time to put the headphones on and listen to the best parts of these calls — the pre-call music. Someone should do an infographic that compares and rates all of the big tech companies by their choices. Who plays it safe? Who takes a risk with metal? Who is a homer and plays local indie music? Anyway, here is the link again.

Hood says devices and consumers had a good quarter, commercial had a very good quarter. “We performed well and you see it,” in the results she said. She highlighted the launch of Xbox One, and says that according to NPD figures the Xbox won the holiday. With Surface, she said, demand is growing.

Hood highlights Windows 8.1. This was the update to Windows that brought back some form of the “Start” button, but sort of not. She said that the business PC market is still soft though it is benefiting from a better “macro” environment. Windows is still the platform of choice, she says. Well, that’s true though we know Apple is making some headway.

Suh is running through the numbers in the earnings release. The new Xbox and Surface launches did eat into margins, Suh said. Microsoft returned a lot of cash to shareholders. Consumer devices had a good holiday. In the software area, the launch of Halo 4 last year made for some unfavorable comparisons.

Cost of Goods Sold (This is “COGS” that comes up often on calls): $6.1 billion to $6.3 billion.

Operating expenses: $7.7 billion to $7.8 billion, up around 5% to 6%.

For the full fiscal year of 2014, Microsoft narrowed its revenue guidance to $31.2 billion to $31.5 billion. It expects a tax rate of 18% to 20%. Capital expenses expected at about $6 billion, down $500 million from past guidance.

Another question on Windows volume licensing. What’s driving it? Hood pulls a jedi move and splits the question into two. She says volume licensing growth of 10% is end of life of XP, but also upgrades to enterprise versions, she says. She reiterates some points from previous questions.

Question on how the gross-margin profile of the company is changing. Good question: if the company wants to be a device hardware company, that has impact. It could be super thin margins, since Microsoft likely won’t get to an Apple level of luxury-type margins. Hood first talks commercial margins in cloud and Azure. It’s flat. Moving to the cloud is going to be a net positive, Hood says.

Some pausing as Hood thinks it over. New consoles are gross margin negative — launches are expensive — but that will change. It will never be an 83% from other businesses. But it will get better. The mix of all the different divisions and what not becomes a match equation, she says.

Oh no … a question back to “contracted” not “billed.” A former colleague from All Things D (now Re/code) once made me laugh out loud during a live blog by just calling it accounting-person questions something something.

Consumer retail question — oh yeah, Microsoft has big stores in the malls and whatnot. Hood says improved retail execution is about partnership. So, basically, if the PC makers and OEMs make good products, Microsoft will do better in stores. She says the company also made investments to improve the buying experience.

Hood just got a shout-out for her substantive answers. She does go into detail. Last quarter, when analysts had to grapple with all of the operational changes, Hood was lauded for patiently walking Wall Street through the changes.

Windows Phone — will Microsoft invest with anyone other than Nokia? There was no phone talk before this moment. Hood says there was growth where they had seen it previously: unsubsidized markets, entry level, for example. Regarding Nokia, no updates. Working hard. One team.

Back to margins and the difference between the varying units. Several times this has come up: how will Microsoft manage the shift the the cloud — the kinds of annual subscription services vs buying software off the shelf — and differences between consumers and businesses. Hood says, look, we are trying to manage them all toward absolute growth.

Office 365 Home question. Hood says only recently has Microsoft started selling this in a different model. She sort of said good point, but didn’t answer any questions. Just that it is a good thing to think about. A lot of these questions are trying to get at what impact the shift to annual subscription type revenue from the way Microsoft has historically done business.

Question: Surface is still losing money. How much volume do you need to sell to start making some money? Nice direct question.

Hood says Microsoft is learning a lot but needs to make more meaningful progress. She said price and gross margin are important areas, and Microsoft has made leaps. She didn’t give a number. Moving on.

Last question: the sexy topic of SQL server. Hood talks up the analytics and reporting. Innovation is appealing. Cloud capabilities get added. Maintain market leadership and then can get to some premium offerings.

This conference call was a sober reminder that the interests of Wall Street — capital allocation, granular performance metrics for unsexy business lines, expenditures — don’t always align with the interests of good headlines. There wasn’t much said on Nokia beyond “we’re a team,” the word “PlayStation” never came up.

Not one person asked about the CEO search.

Because as important a moment this is in Microsoft’s history, the CEO search likely won’t move the needle on next quarter’s per-share forecasts and revenue guidance. What will? Whether Microsoft can shuffle its customers from one era to of buying expensive operating systems and workplace software suites every couple of years to another era of annual subscriptions and recurring trevenue. And stuff like SQL and the cloud, which at the end of the day is really import to the bottom line.

Cost of Goods Sold (This is “COGS” that comes up often on calls): $6.1 billion to $6.3 billion.

Operating expenses: $7.7 billion to $7.8 billion, up around 5% to 6%.

For the full fiscal year of 2014, Microsoft narrowed its revenue guidance to $31.2 billion to $31.5 billion. It expects a tax rate of 18% to 20%. Capital expenses expected at about $6 billion, down $500 million from past guidance.